Determining Property Taxes

Page Content

After the Assessor’s Office determines the market value and classification of the properties, Property Taxation & Records computes the property taxes by multiplying the value of the property by the total tax rate. This tax rate changes based on which county, city or township, school districts or special district the property is located in.

They take into account any credits or programs an owner may be enrolled in to lower the property taxes, such as the homestead exclusion for residential property or Green Acres or Agricultural Reserve programs for agricultural property.

Factors that affect property taxes

The following factors change how much you pay in property taxes.

Your property’s market value changesEach year, the Assessor’s Office studies actual sales of property in each community. Sales in a 12-month time period are reviewed to find out what properties have sold for on the open market. The Assessor’s Office makes sure that market value is similar to like properties.

Also, additions and improvement made to a property generally increases its market value.

Market values of other properties changeProperties change values at different rates. If the market value of a property increases more or less than the average, the taxes on that property will also change.

For example, if your property increases in value more than other properties in your area, your taxes will increase. If your property value increased less than other properties, your taxes will decrease.

State property tax changesThe state directly applies a State General Property Tax to commercial/industrial and season/recreational property classes.

City or township levy changesCities and townships determine their budget for the year. This includes the levy, or the amount of money needed through property taxes to balance the budget. Budgets and levies increase depending on the needs and wants of the community as well as changes to federal and state aid and mandates.

County levy changesThe County determines their budget for the year. This includes the levy, or the amount of money needed through property taxes to balance the budget. Budgets and levies increase depending on the needs and wants of the community as well as changes to federal and state aid and mandates.

School districts levy changesMost of school district budgets are funded by the state, school districts are set levies to balance their budget.

Special assessments addedWater lines, curb and gutter, and street improvements that directly beneﬁt your property may be funded, in whole or in part, through a special assessment that is added to your tax bill.

Special districts levy changesSpecial districts such as the Metropolitan Council, hospital districts, watershed districts and drainage districts set levies to balance their budgets.

Voter approved referendumsLocal referendums may be held for local government construction projects, excess operating levies for schools or many other purposes.

CreditsProperties classified as 2A, 2B and 2C, other than house, garage and surrounding one acre of an agricultural homestead are eligible for Agricultural Preserve Credits, Agricultural Market Value Credits, and School Building Bond Agricultural Credits as shown in step 2 of the Proposed Property Tax Notice.

State changes classification ratesDifferent classes of property are taxed at different rates. Residential, commercial and agricultural property have different rates. A change in the classification rates from the state requires a change in the tax rate to raise the same amount of money.